Western home sales post 15 pct annual jump in June

LOS ANGELES 
Homebuyers across the Western U.S., many convinced home prices are close to the bottom, helped fuel a 15 percent annual increase in the region's home sales in June, according to two reports released Thursday.

Fire-sale prices on foreclosures and other distressed properties lured many buyers, particularly in California, Nevada and Phoenix. Those sales also dragged down the median home sales price in the 13-state region. It tumbled nearly 25 percent from June of last year to $214,800, the National Association of Realtors said.

That was the biggest median price decline in any region and helped pull the national median down about 15 percent from year-ago levels to $181,800. Nationally, sales rose 4 percent, without adjusting for seasonal factors. But more importantly, sales posted their third monthly increase, indicating the housing market has turned the corner and is recovering.

Leonard Baron, a real estate professor at San Diego State University, said for homes in the lower end of the market at least, where many properties are getting multiple bids, "we've hit a floor." But the same is not true of homes above the median price.

"For higher-dollar properties, it's harder to tell," Baron said.

The turnaround in the West, has also been geographically uneven.

Las Vegas, Phoenix, Los Angeles, San Francisco, San Diego and Boise, Idaho, were the only major metros in the West to register an increase in home sales last month, according to The Associated Press-Re/Max Monthly Housing Report, released Thursday.

"Interest rates are very favorable, so I've had a lot of people looking and getting off the fence," said Laura Zajdman, a ZipRealty agent in Los Angeles.

Elsewhere in the West, home sales fell last month in Anchorage, Alaska, Denver, Albuquerque, N.M., Billings, Mont., Honolulu, Portland, Ore., and Seattle, according to the report, which tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.

The demand for bargain-priced properties has created a traffic jam of buyers for lenders trying to unload homes. Often, banks are fielding multiple offers for a single property and buyers are finding themselves forced to put in bids higher than asking price – a market dynamic not seen since the heady days of the housing boom.

"There's an extreme amount of multiple offers on those (bank-owned) properties," said Mike West, broker-owner of Century 21 MoneyWorld in Las Vegas. "A decent property, within days on the market, could literally have 10 to 20 offers."

Those bidding wars are correcting the oversupply of homes on the market. The inventory of homes for sale was down by 25 percent or more from year-ago levels in Las Vegas, Los Angeles, San Francisco, San Diego, Phoenix and Portland, Ore., according to the AP-Re/Max report.

Sellers who are not facing foreclosure are under pressure to lower prices to compete with the distressed homes on the market. Rather than do so, however, many are opting to rent out their home in hopes of waiting out the landslide in housing values.

"They realize they're not going to be able to make a significant profit on the property" if they sell now, said Rick Cheever, broker-owner of Century 21 Performance in the Denver suburb of Castle Rock.

"There's a glut of rental property on the market right now because so many sellers have opted to consider renting the process rather than selling them," he added.

Cheever said his homebuyer traffic rose in June but has begun to ease this month as interest rates have crept higher.

Home sales in Denver tumbled 18 percent last month from June 2008, according to the AP/Re-Max report.

Real estate agents also are seeing more buyers pay cash or make down payments in the 30 percent range.

And not all are professional investors.

Many are people who are seeking alternatives to the stock market or retirement plans for their money. In some cities, rental income, after expenses and taxes, can provide a better return than a savings account.

That kind of thinking prompted Mira Kubiak, 57, to pay cash for the three-bedroom, two and a half-bath town house she bought a few weeks ago in northern San Diego County.

The former mechanical engineer opted not to finance the $280,000 purchase because it made no sense to her to get a mortgage and leave the rest in a risky investment or a savings account offering a paltry return.

"I thought the prices had bottomed out or they were close to the bottom," Kubiak said.